Govt readies amendments to GIBNA for insurance PSU privatisation
PTI, Jul 4, 2021, 12:45 PM IST
New Delhi: To facilitate the privatisation of a public sector general insurance firm, the government is working on amendments to the General Insurance Business (Nationalisation) Act (GIBNA), and a Bill for that is likely to come up in the upcoming monsoon session.
The monsoon session is expected to begin on July 19.
The Act, which came into force in 1972, provided for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers in order to serve better the needs of the economy by securing the development of the general insurance business.
The amendments to the GIBNA are being worked out and maybe tabled in the upcoming session to help privatisation of a general insurance company announced in the Budget this year, sources said.
Finance Minister Nirmala Sitharaman in her Budget 2021-22 had announced a big-ticket privatisation agenda, including privatisation of two public sector banks and one general insurance company.
As part of the divestment strategy for the financial sector, the government has decided to go for a mega initial public offering (IPO) of Life Insurance Corporation of India (LIC) and residual stake sale in IDBI Bank during the financial year beginning April.
The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions during 2021-22.
The NITI Aayog was entrusted with the task of recommending a suitable candidate for the privatisation of two public sector banks and one general insurance company.
The government think-tank is believed to have suggested the name of United India Insurance to the Core Group of Secretaries on Disinvestment headed by the Cabinet Secretary.
Aside from this, the government is gearing itself to table amendments in the Banking Regulation Act, 1949, to enable the privatisation of two public sector banks.
Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, for privatisation, the sources said.
These Acts led to the nationalisation of banks in two phases, and provisions of these laws have to be changed for the privatisation of banks, they said.
Last year, the Union Cabinet, headed by Prime Minister Narendra Modi, cleared a proposal to provide capital support to National Insurance, Oriental Insurance and United India Insurance.
The Cabinet had also decided to increase the authorised share capital of National Insurance Company Limited (NICL) to Rs 7,500 crore and that of United India Insurance Company Limited (UIICL) and Oriental Insurance Company Limited (OICL) to Rs 5,000 crore each to give effect to the capital infusion decision.
At the same time, the Cabinet junked the earlier Budget proposal of merging NICL, OICL and UIICL.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Nifty, Sensex rally for 6th day running on firm Asian peers; Tech Mahindra jumps over 12%
IndiGo, Air India plan to purchase up to 170 wide-body planes in little over a year
Kotak Mahindra Bank shares tank 13%; mcap erodes by Rs 37,721 crore post RBI action
Four-day market rally makes investors richer by Rs 8.48 lakh crore
Kotak Bank barred from onboarding customers online, issuing fresh credit cards
MUST WATCH
Latest Additions
Karnataka officials don vibrant sarees to promote voter participation
Omar, Mehbooba ask EC not to postpone polls in Anantnag-Rajouri LS seat
SC to consider plea of MP Bar Council leaders against contempt proceedings
Karnataka sees over 22% voter turnout in 14 Lok Sabha seats by 11 AM
7 intermediate students die by suicide after announcement of results in Telangana